Taaffe departure prompts H&K to overhaul leadership

Hill & Knowlton has been forced to rethink its leadership structure
after the surprise resignation of global CEO Paul Taaffe.

Taaffe shocked the agency world by resigning this week after 18 years at
the consultancy. His move is understood to be in response to H&K's
merger with US public affairs shop Public Strategies (PSI) in November,
which has seen PSI staffers taking key leadership positions in a new
structure.

Taaffe found himself reporting to global chairman Jack Martin, founder
of PSI, and it is thought this arrangement prompted his exit. Martin has
now assumed Taaffe's global CEO responsibilities.

One former senior H&K executive said that the merger had turned out to
be 'a reverse takeover' with PSI effectively seizing control of H&K. The
source said: 'It is extraordinary the way what the biggest agency in the
world is being dismantled ... PSI is now running the show, but it has no
international experience.'

Another source suggested that once the structure in the US was bedded
in, senior H&K figures in Europe were likely to come under pressure.

However, Sally Costerton, chairman and EMEA CEO at H&K, insisted that
the PSI merger was 'amicable and constructive'.

Howard Paster, WPP executive vice president of PR and public affairs,
noted that Martin Sorrell's recent comments citing the strong
performance of Burson Marsteller indicated he was 'looking for more'
from H&K.

He added the merger had resulted in 'crowding at the top' and said: 'We
respect and understand (Taaffe's) decision.'

Taaffe joins other senior staffers in stepping down this week -
long-serving chief marketing officer Tony Burgess-Webb has also
announced his retirement and MaryLee Sachs, director of H&K's worldwide
marketing comms practice, will also quit the agency.